The agreement with Brazil will allow Argentina to help resolve the crisis in the auto industry. Unions affiliated to the CGT believe the agreement will boost the sector and create jobs.
Leaders of the Confederación de Gremios Industriales, led by Ricardo Pignanelli (SMATA) and Antonio Caló (UOMRA), both affiliated to IndustriALL Global Union, met the Argentina industry minister, Debora Giorgi and expressed their support for the agreement, which tries to stabilize the auto industry at a time when the economy is slowing down.
Also present at the meeting were the general secretaries of the following affiliates: Federación Obrera Nacional de la Industria del Vestido, Romildo Ranú; Asociación de Supervisores de la Industria Metalmecánica, Luis García; Asociación Obrera Minera, Héctor Laplace; Sindicato de Obreros Curtidores, Walter Correa and Federación Argentina de Petróleo y Gas, Alberto Roberti.
In their joint press release Brazil and Argentina governments said the agreement reduces the number of tax-free vehicles and auto parts that Brazil can export to Argentina and establishes that for every US$1 of automotive products exported to Brazil, Argentina will import US$1.5 of automotive products from Brazil. The ratio, in what is known as the Flex clause, was previously US$1 to US$1.95.
Ricardo Pignanelli told the media that the agreement with Brazil "helps a lot because it will allow us to sell 40,000 units more than last year" and "focus on auto parts".
This will relieve the critical production and employment situation in the sector. It could reduce the price of some models by 10 per cent and new models by 7 or 8 per cent.
The agreement is valid until 1 July 2015 and negotiations will continue on a new agreement for the period 2015-2020.